To Secure America’s Future, We Must Fix Defense Procurement Now

The strength of the United States has always come from its ability to harness and scale innovation faster than its adversaries. Yet today, our defense procurement system does the opposite. It stifles innovation, rewards process over outcomes and leaves the Department of War struggling to field capabilities our service members urgently need.

As global threats intensify, leaders on both sides of the aisle agree that our slow and inflexible defense acquisition system must be dramatically reformed — now. This spring, President Trump issued a sweeping executive order directing the Pentagon to implement major reforms to its procurement practices to promote innovation and an expanded industrial base. Bipartisan leaders of the House and Senate Armed Services Committees have put forward key legislation to restructure the way the Department develops and buys new capabilities. This is a once-in-a generation opportunity that we cannot afford to let pass without significant reforms.

Despite taxpayers spending over $850 billion annually on defense, potential adversaries are catching up in both the adoption of key technologies, including artificial intelligence and autonomy, and the scale at which they are able to produce new systems. The slow pace of Pentagon acquisitions has weakened the industrial base with inconsistent demand signals and overly complex requirements that don’t always align to operational needs or keep pace with the rapid advancement of technology.

Nowhere is this shortfall clearer than at sea. America’s shipyards, once capable of outproducing all adversaries on a global scale, have atrophied to a point where we cannot build critical vessels anywhere near the pace of our counterparts. Today, China outproduces the United States in shipbuilding alone at a ratio of 230 to 1.

A new generation of defense industry backed by private capital is emerging to tackle these challenges, leveraging commercial technologies to develop cutting-edge capabilities and building manufacturing capacity to enable production at scale. Only three years old, Saronic Technologies has already brought multiple classes of Autonomous Surface Vessels (ASVs) to market, while leaning in with major investments in production capacity ahead of need, exactly the type of proactive industry leadership that U.S. government leaders have been calling for. Saronic’s rapid prototyping-to-production cycle, leveraging resilient domestic supply chains, is proving that new platforms enabled by advanced technology can be fielded at commercial speed and cost, offering warfighters the capabilities they need now.

Yet the Pentagon’s acquisition framework simply hasn’t kept pace. The defense acquisition system must be overhauled to enable the Department of War to do what its leaders say they want: harness commercial innovation to rapidly field advanced capabilities at scale. Achieving this goal requires action in three key areas.

First, the Pentagon should maximize procurements through more flexible commercial contracting methods, such as Other Transaction Authorities. By reducing its focus on buying for gold-plated military requirements, the Department of War stands to gain by broadening the playing field to new commercial companies. This would ultimately lower costs for taxpayers, eliminate billions in wasteful spending, and rebuild a competitive defense industrial ecosystem.

Second, the Pentagon should strive to reduce the burden of compliance to enable new entrants to compete in the market. By doing things like expanding the definition of “non-traditional defense contractor” would enable more small companies to maintain this status, which provides relief from certain compliance requirements, as they begin to win contracts and deliver capability to the Department of War. The current system forces firms to take on costly regulatory burdens at the exact moment they are starting to achieve success. In addition, the Pentagon could reduce its emphasis on past performance in evaluating bids and awarding contracts. This practice serves to effectively shut out new entrants with novel technologies. Compliance requirements and past performance evaluations should serve to protect the taxpayer and ensure contractors can really deliver on their promises, not provide a shield to incumbents.

Lastly and most challenging, the Department of War will need to shift incentives to promote innovation and speed to delivery. The problem is not the desire to ensure safety and reliability, but that the current system actually hinders the achievement of these objectives by creating barriers to competition that drive higher standards of performance and capability. The Pentagon and Congress are taking promising steps to revamp laws and policies to promote a more modern defense acquisition system, but a focus on implementation and rewarding those who focus on delivering for the warfighter at speed and scale will be critical to rebuilding the defense industrial base and our shipbuilding infrastructure.

Strategic competitors around the world are not waiting for us to catch up. They are developing, testing, and outpacing our capabilities. We must expand the ranks of innovative new companies that can participate in the industrial base, and reward those who can deliver outcomes for our warfighters. A more competitive and open system will push every participant to deliver more effectively and more efficiently, benefiting service members, taxpayers, and ultimately the security of our nation.